Markus Kypreos, research attorney for the Texas District & County Attorneys Association, has a follow-up to his December article on public free-entry poker tournament legality in Texas in this month's issue of The Prosecutor, reinforcing his belief that free-entry poker is indeed illegal.

It’s a blatant attempt to circumvent Penal Code 47.02(a)(3) by playing musical chairs. The code specifically prohibits games where a participant "plays or bets for money or other thing of value." If the grand prize is a trip to Las Vegas and the person with the most chips at the end of the night wins that trip, then those chips' value is the amount a trip to Las Vegas costs.

Approach the issue from another angle: Why did the winner receive a trip to Las Vegas? Because he won the poker tournament by accumulating the most chips. And how did he accumulate the most chips? By betting. Betting and receiving prizes are interrelated -- they cannot be separated to evade Texas gambling laws.

If you’re still unsure, Attorney General Greg Abbott is supposed to weigh in on the subject by June. I suppose he is more of an authority on Texas laws than I am. This is also a good time to thank Ector County District Attorney John Smith for requesting an opinion on the issue and for his quote in the Austin American-Statesman newspaper on public poker: "Up here, we call that gambling."

Link

In his Q & A section, Kypreos says:

Q: By your logic, the Monopoly game at McDonald’s and radio station giveaways are also illegal. Why are those allowed to operate in Texas?

A: Because they aren’t illegal. The key word in 47.02 is "bet." No bet occurs in the Monopoly game. You can write to McDonald’s to receive as many free game pieces as you want. The same holds true for radio stations. They simply give prizes away. Betting is inherent to poker and, thus, why it’s illegal.

While I agree with Kypreos on the above point, he conveniently omits the games I posed questions to him about back in December over our email thread -- things like promotional games from companies where players can play "fake" blackjack and roulette for prizes, or free-entry casino nights that give out prizes, or television game shows where players can risk their existing points to win prizes etc.

Kypreos' answer to this at the time was "You are exactly right when you make the analogy of casino nights or fake blackjack games for prizes. All of these have long been held illegal, though we see that they occur anyway."

It's an important question to consider along with the legality of free-entry poker tournaments, since there is a pretty wide swath of activities like the ones I mention which now may be avoiding the eye of the law, perhaps because of inertia to make a decision on them, but which immediately become under scrutiny, and probably prosecution, if free-entry poker tournaments are deemed illegal.

I'll be interested to see what the AG has to say this summer on the subject, since that will almost certainly tip the scales of prosecutor opinion in the state of Texas on what is and is not legal with respect to free gambling.

I still hold that what makes chips not a "thing of value" in a poker tournament are that chips are never redeemed for prizes, since prizes are not awarded according to number of chips. At the end of the tournament many people may win prizes, but other than first place, all of the winners hold zero chips at the end of the tournament. So what holds value in a poker tournament is not number of chips, but amount of time you hold at least one chip, relative to the rest of the players. And the thing that governs the total length of time it takes you to lose all your chips is your ability to marshal your stack through the tournament. While having more chips may help you survive longer, so does playing less hands -- a chip itself is of no value during or after the tournament. The only thing that is of value is the fact that you have not lost all your chips. It seems a distinction that may likely be lost on the ears of a prosecutor or attorney general, but I believe it's an important one nevertheless.

The future of legal, public free-entry poker tournaments in Texas depends on it.

Jeremy, what he is missing is that the definition of a "bet" in the penal code is to "Win or lose something of value solely or patially by chance". That has been held to mean you need something at risk to lose (consideration), something at risk to win (a prize) and chance. Free poker is not gambling because it is not betting, there is nothing at tisk. What he seems to imply is that if we played face up, all in poker, it would be legal, because it would be all chance, no skill.

Posted by: Matt Stephans on April 19, 2005 10:46 AM

A bar owner purchases a trip for 2 to Las Vegas and a promotion for his business. He is going to decide the winner of the promotion based on the following. There will be a dart tournament. Each player is given 500 points with their FREE entry. Players may play against anyone or as many people as they choose and when they decide to play. They must play at some point. The players that win collect points from the other players. The player who collects all the points wins the promotional prize. Would this be legal for my business to do?

Change the freakin laws!

Posted by: Carl on April 19, 2005 12:50 PM

Any government, any state, any party will consider gambling illegal until they can figure a way to effectively derive a tax from it; under the fallacy of school funding.

Posted by: Jason Lewis on April 19, 2005 01:10 PM

Here's what confuses me:

The pool leagues in texas getting away with cash tournaments for years. That is, they're tournaments with an entry fee, and cash payouts, not a "free entry" one. You pay your dues each week to play, but throughout the season they hold side tournements with entry money.

Same thing goes for pool halls that hold tournaments themselves without any league affiliation.

I don't see a difference here, except for the fact that you're a league member.

Posted by: Chach on April 19, 2005 02:20 PM

The difference is that darts and pool are games of skill, not chance.

I think the biggest arguments against the attorney's interpretation have already been stated:
1. Someone without any chips can still win something (second place).
2. It is not a bet because nothing can be lost

I have a feeling this is going to have to be argued in court unless someone can figure out an incentive for a politition to fight for a change in the law.

Posted by: Mike McCartney on April 20, 2005 09:27 PM

The difference is that darts and pool are games of skill, not chance.

I think the biggest arguments against the attorney's interpretation have already been stated:
1. Someone without any chips can still win something (second place).
2. It is not a bet because nothing can be lost

I have a feeling this is going to have to be argued in court unless someone can figure out an incentive for a politition to fight for a change in the law.

Posted by: Mike on April 20, 2005 09:29 PM

sorry about the dup - won't happen again.

Posted by: Mike on April 20, 2005 09:31 PM

Who is this clown anyhow? Best I can see, he is a young guy, barely out of law school, suffering from some extreme delusions of grandeur. Let's address the two things we know about this guy.

He thinks very highly of himself. The comment "I SUPPOSE [Greg Abbott] is more of an authority on Texas Laws than I am" just shows what kind of an ego this guy has. Greg Abbott is a respected litigator, and the appointed Attorney General. Markus Kypreos is basically a clerk.

He also is delusional. His claim in his article this month was that if you did a search on his name and poker, you would find lots of links calling for his head, or saying bad things about him, or whatever he was babbling about. I've searched Google, Yahoo, hell I even went to Alta Vista. There is nothing on the web that is bad about this guy. I'm not sure where he gets all of his ideas, but he is totally on another planet.

Posted by: chuck on April 23, 2005 01:20 PM

Who is this clown anyhow? Best I can see, he is a young guy, barely out of law school, suffering from some extreme delusions of grandeur. Let's address the two things we know about this guy.

He thinks very highly of himself. The comment "I SUPPOSE [Greg Abbott] is more of an authority on Texas Laws than I am" just shows what kind of an ego this guy has. Greg Abbott is a respected litigator, and the appointed Attorney General. Markus Kypreos is basically a clerk.

He also is delusional. His claim in his article this month was that if you did a search on his name and poker, you would find lots of links calling for his head, or saying bad things about him, or whatever he was babbling about. I've searched Google, Yahoo, hell I even went to Alta Vista. There is nothing on the web that is bad about this guy. I'm not sure where he gets all of his ideas, but he is totally on another planet.

Posted by: chuck on April 23, 2005 01:21 PM

AG Greg Abbott says free poker is legal. Kypreos is a clown. I was right, he was wrong, neener neener neener!

Posted by: chuck on June 22, 2005 03:32 PM

The statute states the following:
§ 47.02. GAMBLING. (a) A person commits an offense if
he:
(1) makes a bet[0] on the partial or final result of a
game or contest or on the performance of a participant in a game or
contest;
(2) makes a bet[0] on the result of any political
nomination, appointment, or election or on the degree of success of
any nominee, appointee, or candidate; or
(3) plays and bets[0] for money or other thing of value at
any game played with cards, dice, balls, or any other gambling
device.
(b) It is a defense to prosecution under this section that:
(1) the actor engaged in gambling in a private place;
(2) no person received any economic benefit other than
personal winnings; and
(3) except for the advantage of skill or luck, the
risks of losing and the chances of winning were the same for all
participants.
(c) It is a defense to prosecution under this section that
the actor reasonably believed that the conduct:
(1) was permitted under Chapter 2001, Occupations
Code;
(2) was permitted under Chapter 2002, Occupations
Code;
(3) consisted entirely of participation in the state
lottery authorized by the State Lottery Act (Chapter 466,
Government Code);
(4) was permitted under the Texas Racing Act (Article
179e, Vernon's Texas Civil Statutes); or
(5) consisted entirely of participation in a drawing
for the opportunity to participate in a hunting, fishing, or other
recreational event conducted by the Parks and Wildlife Department.
(d) An offense under this section is a Class C misdemeanor.
(e) It is a defense to prosecution under this section that a
person played for something of value other than money using an
electronic, electromechanical, or mechanical contrivance excluded
from the definition of "gambling device" under Section 47.01(4)(B).

Therefore, our hopes of legality are dashed when the statement regarding "plays and bets[0] for money or other thing of value at any game played with cards, dice, balls, or any other gambling device."

The thing of value you are playing or betting for is the prize, be it a stuffed panda bear or cash or a trip to Vegas. The value of the chips is immaterial. It's the bet FOR something of value. If you have no prize and no entry fee, it's legal.

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